Daniel Loeb

Daniel Loeb

Last Update: 2014-05-15

Number of Stocks: 47
Number of New Stocks: 21

Total Value: $6,808 Mil
Q/Q Turnover: 43%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Daniel Loeb Watch

  • Third Point Comments on Royal DSM NV

    Over the past three years, Royal DSM NV (“DSM”) has transformed itself into a leading global life sciences company focused on health and nutrition with ~$12 billion of sales and ~$1.7 billion of EBITDA. DSM’s portfolio of businesses also includes legacy activities in materials sciences. While the Materials segments account for ~55% of sales, their profit contribution to the DSM group (~30% of EBITDA) has been greatly surpassed by that of the Nutrition segment (~70% of EBITDA). Earlier this year, DSM shares sold-off following: i) a profit warning in the Nutrition segment, and ii) growing skepticism about DSM’s ability to execute on its plan to divest its commodity caprolactam business. The weakness in DSM’s share price served as an opportunity to build our position. We believe that the profit warning in Nutrition was driven by cyclical factors and abnormally adverse weather rather than any structural changes in the underlying fundamentals. We are also optimistic that management can successfully separate its commodity caprolactam exposure through either a sale or joint venture. Finally, near-term trends are positive in both of DSM’s businesses, with Nutrition starting to show signs of reverting to a more normalized growth rate and Performance Materials starting to inflect from depressed levels given its exposure to rebounding European automotive and construction markets.


    DSM group currently trades at 7.5x forward EV/EBITDA. Based on our analysis, we believe that both the Nutrition and Performance Materials segments should command higher multiples than DSM’s current group multiple. The low group valuation is driven by the continued presence of the Performance Materials and Polymer Intermediates segments. These businesses have de minimis end-market overlap or synergies with Nutrition. Furthermore, the non-nutrition businesses are structurally more volatile and have lower returns, making the combined entity cumbersome for investors to analyze and appropriately value.

      


  • Daniel Loeb’s Third Point Second Quarter 2014 Investor Letter

    Review and Outlook


    Markets moved higher in the first half of 2014, despite an early sell-off in heavily-owned hedge fund names and popular technology stocks. While investors perceived the market as volatile, the +7% return for the first half largely exceeded expectations.

      


  • Einhorn Is Transforming BioFuel Energy Into A Profitable Real Estate Company

    Two of the gurus that I follow at GuruFocus are David Einhorn and Daniel Loeb. They are both considered to be activist investors and their hedge funds have experienced extraordinary results. Loeb started Third Point Capital in 1995 and Einhorn started Greenlight Capital in 1996. Third Point Capital has returned 20.4 percent annulized since its inception in 1995, and Greenlight Capital has returned 19.5 percent annualized since May of 1996.


    Together they hold 52.8 percent of BioFuel Energy Corp (BIOF) with Einhorn holding 35.4 percent and Loeb holding 17.4 percent of the shares outstanding (including B Shares) according to the Form S-1 filed with the SEC on 7/16/2014. BioFuel is going through some major changes and will be reinventing itself as a real estate company. With the exceptional track record of the two hedge fund managers, Biofuel Energy is going to be a stock to keep an eye on.

      


  • Gain Access to Daniel Loeb’s Hedge Fund Through Third Point Re

    Through my research of Greenlight Re (GLRE), I discovered Third Point Reinsurance (TPRE). Third Point Re was listed as the most similar, publicly traded competitor to Greenlight Re. The company is a way to gain access to Daniel Loeb’s hedge fund without needing the typical $1 million to invest in such a fund. Loeb has been one of the best performing gurus that we follow at GuruFocus. Third Point’s funds have blown away the S&P 500 over the years. The Master Fund has provided an annual return of 20.4 percent since inception in 1995 compared to the S&P 500’s annual return of 9.7 percent.


      


  • Can Loeb Reinvigorate Sotheby’s?

    Now that Third Point LLC’s founder and CEO, Daniel Loeb, and the board of Sotheby’s (BID) have come to an agreement, is now the time to buy the stock? There is currently an opportunity to buy it at a lower price than Loeb. He currently has 6.35 million shares valued at valued a little under $260 million. His average purchase price is $43.91 with his purchases starting in February of 2013. The stock is now trading for about 7 percent less at $40.76.


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  • Daniel Loeb Comments on SoftBank Corp

    SoftBank Corp. (TSE:9984)("SoftBank") Update Following its strong rally at year‐end, SoftBank shares pulled back 15% during Q1 2014. We believe this pullback was due to technical trading and that SoftBank's fundamentals are stronger than when we initiated the position during the fourth quarter of 2013. SoftBank has continued to demonstrate significant value growth in key drivers across each of its underlying businesses. The Japanese wireless segment successfully navigated the temporary impact of NTT's iPhone offering and seasonal promotional activity in March 2014, while consensus valuations for Alibaba Group have grown from $120 billion to $171 billion year‐to‐date. These trends play into the four‐pronged equity value expansion story for SoftBank shares:


    1) SoftBank Mobile value expansion of ¥230 per share annually (EBITDA growth, constant multiple)

      


  • Daniel Loeb Comments on IHI Corporation

    Equity Position: IHI Corporation ("IHI")(TSE:7013)


    IHI is a mid‐cap Japanese conglomerate exposed to three big themes: commercial aerospace, automotive fuel efficiency, and Abenomics‐led real estate reflation in Tokyo.

      


  • Third Point (Dan Loeb) Q1 2014 Letter to Investors



  • Is Liberty Global Speeding Up Too Quickly?

    Liberty Global Plc (LBTYA)’s John Malone has a track record for purchasing small and medium-sized companies, with the goal of expanding the media and communications empire. The most recent example of this strategy was seen at the beginning of the month, when the company acquired the remaining 20% of Chile’s largest cable operator VTR for 10.1 million shares ($422 million). Furthermore, to guarantee the firm’s proper management and elevate the customer experience, VTR has entered Telecom Italy’s Global Partnership Program, which should help improve operational efficiency. However, while there is no doubt about Liberty’s growth prospects, many investment gurus like Eric Mindich (Trades, Portfolio) and Daniel Loeb (Trades, Portfolio) have been reducing or selling out their shares in the company, due to lax returns on investment.


    As Scale Grows, So Does Debt

      


  • Sotheby's Response to Third Point Litigation

    NEW YORK, March 25, 2014 (GLOBE NEWSWIRE) -- Sotheby's (BID) issued the following in response to reports that Third Point has filed litigation against the Company.


    Late last year, Sotheby's adopted a one-year shareholder rights plan, which expires in October 2014 and cannot be extended beyond October 2014 without shareholder approval. It is similar to those adopted by numerous publicly traded companies facing similar situations. Sotheby's shareholder rights plan was adopted in response to rapid accumulations of significant portions of the Company's outstanding common stock, including through derivatives.

      


  • Activist Billionaire Daniel Loeb in a Battle for Control of Sotheby’s

    Daniel Seth Loeb is founder of Third Point LLC, a New York-based hedge fund. On Feb. 27, he added Sotheby's (BID) at an average price of $50.51 and on March 11, he added the stock again at an average price of $47.27. He currently holds 6.65 million shares of the stock with a current value of $293 million in his portfolio and his stake in Sotheby's is about 9.6%. So let's take a look at this company and try to explain to investors the reasons why he is betting on it.


      


  • Sotheby's Open Letter to Shareholders Regarding Third Point’s Board Nominees

    SOTHEBY’S SENDS OPEN LETTER TO SHAREHOLDERS


    • Sotheby’s Has the Right Plan and the Right Team to Continue Building Sustainable Value for Shareholders and Clients
    •   


  • Daniel Loeb is Buying BlackBerry–Should You?

    BlackBerry (BBRY) has been a value trap that has ensnared more than its share of value hunting investors in recent years —yours truly included. Buying BlackBerry stock will also likely go down in history as the single-worst investing mistake in the otherwise illustrious career of Prem Watsa (Trades, Portfolio) — the chairman ofFairfax Financial (FRFHF) and the man commonly known as the “Warren Buffett of Canada.”

    Attempting to call the bottom in BlackBerry stock — and ultimately getting burned — appears to be something of a rite of passage.  


  • Loeb Has the Right Position and Waits for a Potential Merger

    Activist investor Daniel Loeb (Trades, Portfolio) added T-Mobile US Inc. (TMUS) at a price of $25. It makes me feel that he is betting that the company could be acquired by Sprint Corp. (S) or Dish Network Corp. (DISH). So let's take a look at this company and try to explain to investors the reasons this is an apparently appealing investment opportunity.


    Strategic Acquisitions

      


  • Daniel Loeb Comments on Intrexon Corporation

    Equity Position: Intrexon Corporation (XON) ("Intrexon") We initially invested in Intrexon in 2011 in a private round and have continued to accumulate shares since its IPO in August 2013. We believe that Intrexon is an innovation leader in synthetic biology with a unique value proposition and proven leadership team. Most attractive to us is Intrexon's potential to transform multiple industries, including the health, food, and energy markets. 


    Synthetic biology is an emerging discipline that applies engineering design principles to biologic systems. Broadly speaking, synthetic biology is about the design, modification, and regulation of gene programs to produce a desired outcome, such as the production of a novel antibody from a cell culture, the optimization of a specific gene trait in crops, or the amplification of wild type natural gas metabolism into an industrially feasible process. Over the past 15 years, Intrexon has developed deep expertise in synthetic biology as well as the adjacent fields of process optimization and data analysis to create a unique technology platform that enables the iterative, directed improvement of experimental design. 

      


  • Daniel Loeb Comments on T-Mobile

    T-Mobile (TMUS) – We had the opportunity to establish a position in T-Mobile in November when the Company conducted a secondary offering at $25. The offering represented a favorable relative valuation versus peers, enhanced by recently improved relative operating performance and an attractive EBITDA growth trajectory. 


    In addition to T- Mobile's fundamental v alue proposition, the Company is strategically interesting for Sprint and potentially DISH, which has driven shares higher. The analyst community has offered mixed messages on the prospects for a merger with Sprint, indicating an unwillingness on the part of the DoJ and FCC to approve consolidation while acknowledging the significant financial and scale disadvantages Sprint and T-Mobile face and the inevitability of a combination. Perhaps the starkest examples of the reality of the U.S. wireless industry are the incredible gaps analysts expect in subscriber net additions and free cash flow between 2013 and 2015. During the same period, Sprint and T-Mobile are expected to continue to lose share on a combined basis, attracting less than 15% of industry net additions compared to their current joint subscriber market share of just under 30%. Meanwhile, AT&T and Verizon are expected to generate over $83 billion of combined free cash flow between 2013 and 2015, while Sprint and T-Mobile are expected to burn an unhealthy $10 billion of cash together as they cede market share. 

      


  • Daniel Loeb Comments on Sony

    Sony (SNE) – While the rejection of Third Point's proposal to partially list the Entertainment business proved costly for shareholders, we are hopeful that the Company's commitment to improve transparency, increase margins, better allocate capital among divisions, and hold division management accountable will lead to our goal: increasing shareholder value. Despite the rise in the Company share price earlier in the year, Sony shares still trade significantly below their sum of the parts valuation. 


    Sony started 2014 strongly at the Consumer Electronics Show in Las Vegas, winning two best-of-show awards for PlayStation 4 and the Xperia phone. The show's highlight was news that Sony had sold 4.2 million Playstation 4's in 2013 versus 3.0 million Xbox One's. Sony appears set to sustain strong global momentum with the Japanese launch of the Playstation 4 in February. February is also rumore d to mark the launch of Sony's Xperia Z2 phone, with the potential for meaningful distribution expansion in North America and elsewhere.

      


  • Daniel Loeb Comments on Ally Financial

    Third Point has invested across the capital structure of Ally Financial (ALFI), the former GMAC, throughout the company's multi-year reorganization. Today's Ally Financial ("Ally") fits the pattern of other profitable investments we have made: a highly successful, nearly-completed restructuring that remains undervalued, with an explosive earnings story led by a talented management team who are economically aligned with shareholders.


    We invested initially in 2011 in Ally's unsecured debt and preferred securities because we believed market estimates of potential liabilities related to the company's w holly owned mortgage subsidiary, Rescap, were excessive. When Ally stopped funding its losses through direct loans and sought to distance itself from Rescap 's b allooning potential liabilities in 2012, Rescap filed Chapter 11. After nearly one year of creditor negotiations, Ally permanently settled all mortgage related liabilities for approximately $2 billion, a figure that was consistent with our expectations. During this period, Ally initiated a radical operational restructuring that included divesting all of its international operations and their associated $30 billion of assets and jettisoning Rescap, transforming Ally into a pure-play North American auto finance company with leading market share. 

      


  • Daniel Loeb Comments on Dow Chemical Company

    Third Point's largest current investment is in The Dow Chemical Company (DOW)("Dow"). Dow shares have woefully underperformed over the last decade, generating a return of 46% (including dividends) compared to a 199% return for the S&P 500 Chemicals Index and a 101% return for the S&P 500.1 Indeed, in April 1999, nearly 15 years ago, an investor could have purchased Dow shares for the same price that they trade at today! These results reflect a poor operational track record across multiple business segments, a history of under-delivering relative to management's guidance and expectations, and the ill-timed acquisition of Rohm & Haas. The company's weak performance is even more surprising given that the North American shale gas revolution has been a powerful tailwind for Dow's largest business exposure – petrochemicals. 


    We believe that Dow would be st serve shareholders' interests by engaging outside advisors to conduct a formal assessment of whether the current petrochemical operational strategy maximizes profits and if these businesses align with Dow's goal of transforming into a "specialty" chemic als company. The review should explicitly explore whether separating Dow's petrochemical businesses via a spin - off would drive greater stakeholder value.

      


  • Daniel Loeb Third Point - Q4 2013 Investor Letter



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